Can an auto loan contract be revoked after the purchaser already has the vehicle?

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Can an auto loan contract be revoked after the purchaser already has the vehicle?

I purchased a vehicle 5 days ago. All paperwork was signed. Then 3 days later the dealership phoned stating they needed more money down for the purchase or I could pick another vehicle. The reason they gave was that the lender didn’t feel comfortable with the deal. Can the bank do that? Can I keep the vehicle? 

Asked on June 1, 2011 under General Practice, North Carolina

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

When an auto lender is involved in the purchase of a car, a dealerships has 2 methods of letting a buyer drive away with the vehicle that same day: (1) either the purchaserer has already been approved or is approved on the spot; or (2) the purchaser signs a document allowing them to take possession of the vehicle with the understanding that they must immediately return it if financing is not obtained (i.e. your continued possession is contingent upon loan approval). 

Without seeing the paperwork that you signed its hard to say for sure. Yet it appears that you were apparently approved for a loan and got the vehicle but now the lender has thinks that it may have made a bad deal and has gotten cold feet.  This why they want additional money down. However the lender cannot now ask you to bring additional monies to the table. There several issues relating to the law (contractual and equitable) that are potentially involved here such as anticipatory breach and detrimental reliance.  You should immediately contact your state's banking department or attorney general and file a complaint. 


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